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Australia Gifts and Fundraising for NFP Guide

the Australian gifts and fundraising for the not-for-profit organisations. The guide covers: the deductible gift recipient — DGR status (the "DGR endorsement") — the "deductible gift recipient (the DGR)" is the status that allows the organisation to receive the "tax deductible donations" (the "gifts of $2 or more" that are deductible to the donor); the NFP organisation must apply for the DGR endorsement through the "ATO online services" or the "paper form" (the "NAT 2923" form); the DGR endorsement is available for the "specific categories" of the organisations: (a) the "public benevolent institutions (the PBIs)", (b) the "health promotion charities", (c) the "hospitals", (d) the "schools and the universities", (e) the "cultural organisations" (the "galleries, the museums, the libraries"), (f) the "environmental organisations", (g) the "overseas aid funds"; the DGR endorsement must be renewed if the organisation changes the structure or the activities; the tax deductible donations (the "rules for the deductible gifts") — the donor can claim the "tax deduction" for the "gift of $2 or more" to the "DGR-endorsed organisation"; the gift must be: (a) the "voluntary transfer" (the "no requirement to receive the benefit in return"), (b) the "money or the property" (the "cash, the shares, the property"), (c) the "made to the DGR-endorsed entity"; the donor cannot claim the deduction for: (a) the "membership fees" (unless the fee is the "donation" and the membership benefits are the "incidental"), (b) the "fundraising event tickets" (the "cost of the ticket for the dinner, the gala, the auction"), (c) the "goods purchased from the charity shop" (the "op shop purchases"); the fundraising and the tax (the "tax treatment of the fundraising activities") — the NFP organisation's "fundraising income" (the "income from the fundraising events, the raffles, the sausage sizzles, the fetes") is generally the "mutual receipts" (the "income from the members and the supporters") and is not subject to the income tax if the organisation is the "tax-exempt entity"; the fundraising income from the "non-members" may be the "assessable income"; the NFP must report the fundraising income in the "annual return" (the "Annual Information Statement" for the ACNC).

DGR Application Process

  • Endorsement requirements: The NFP organisation must: (a) have the "Australian Business Number (the ABN)", (b) be the "tax-exempt entity" (the "income tax exempt" or the "charity" registered with the ACNC), (c) operate in the "DGR category" (the "PBI, the health, the education, the culture, the environment"), (d) meet the "governing documents" requirements (the "trust deed or the constitution" must require the "transfer of the assets on the winding up" to the "another DGR entity").
  • DGR categories: The DGR is divided into the "general categories" (the "Item 1" — the "public benevolent institutions") and the "specific categories" (the "Item 2" — the "health promotion charities", the "Item 3" — the "hospitals", the "Item 5" — the "educational institutions", the "Item 6" — the "art galleries and museums", the "Item 9" — the "environmental organisations").
  • Fundraising appeals: The NFP can register the "deductible gift register" for the "specific fundraising appeal" (the "appeal for the specific project or the event"). The donor can claim the deduction for the gifts made to the appeal. The appeal must be registered with the ATO and must have the "specific purpose" and the "specific timeframe".

For the NFP registration and the tax concessions, see our Charities & Not-for-Profit Guide →.

Gifts of Property and Shares

  • Gifts of the shares: The donor who gifts the "listed shares" (the "ASX-listed shares") to the DGR entity can claim the "deduction for the market value" of the shares on the date of the gift. The donor does not pay the "CGT" on the gifted shares (the "no CGT on the donation" under the "CGT exemption for the gifts").
  • Gifts of the property: The donor who gifts the "real property" (the "land or the building") to the DGR entity can claim the "deduction for the market value" of the property. The donor may be liable for the "CGT" on the property (the "no automatic CGT exemption for the property" unless the "CGT exemption" applies). The valuation must be obtained from the "qualified valuer".
  • Cultural gifts program: The "Cultural Gifts Program" (the "CGP") allows the donor to gift the "cultural items" (the "artworks, the artefacts, the manuscripts") to the "public art gallery, the museum or the library". The donor can claim the "tax deduction for the market value" of the item. The CGP is administered by the "Department of the Arts".

For the CGT rules for the assets and the properties, see our Capital Gains Tax Guide →.